All Insurance Companies Introduce Special Clause for Full Coverage of Battery Replacement Costs
[Asia Economy Reporter Ki Ha-young] Over the past five years, the number of electric vehicles (EVs) has increased about 24 times, raising consumer interest in electric vehicle insurance. Accordingly, financial authorities have clarified the compensation method for EV batteries, and the insurance industry is introducing various special clauses.
According to financial authorities and the industry on the 16th, from this month, through policy revisions, the compensation method for EV batteries will be clarified, and all insurance companies will introduce a special clause that fully compensates battery replacement costs in the event of self-vehicle accidents.
According to the Ministry of Land, Infrastructure and Transport, the number of registered EVs last year was 134,962, nearly 24 times the 5,712 registered at the end of 2015. However, for EVs, average repair and parts costs are 31% and 52% higher respectively compared to other vehicles, resulting in a significant financial burden for consumers. In particular, batteries are expensive, accounting for about 40% of the EV price, but except for some insurance companies, special automobile insurance clauses that fully cover battery replacement costs have not been sold, placing a heavy economic burden on EV drivers.
The Financial Supervisory Service expects that this system improvement will clarify the compensation method for EV batteries and prevent unnecessary disputes in advance. Additionally, the introduction of the special clause for full compensation of battery replacement costs is expected to eliminate blind spots in coverage for EV batteries, which previously lacked sufficient compensation, and expand consumer choice.
The insurance industry is also introducing dedicated insurance or special clauses related to EVs. DB Insurance and Hyundai Marine & Fire Insurance are selling dedicated EV insurance, and other insurance companies are offering EV-related products in the form of special clauses.
Recently, digital non-life insurer Carrot Insurance launched a dedicated per-mile automobile insurance for EVs. This insurance strengthens compensation standards, allowing support for excess repair costs up to 150% and expanding free emergency towing service distance to 120 km. Carrot Insurance plans to expand the coverage range to all EVs, starting with the Kia EV6.
Last month, KB Insurance launched an eco-friendly automobile insurance product featuring the 'Electric Vehicle Personal Injury Compensation Special Clause.' This is designed for consumers exposed to electric shock or fire accidents during EV charging. While existing automobile insurance only covered fire accidents occurring while inside the vehicle, this special clause also covers electric shock and fire accidents occurring during charging when not inside the vehicle.
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